Friday, September 9, 2011

Was Anybody Listening?

I think most of the commentators missed a key point in last night's speech. The President intends to tie his American Jobs Act into the Super Committee's deliberations. He told us that the entire bill ($450 billion price tag, a number he did not mention in his speech) will be added on to the $1.5 trillion deficit reduction target, giving $1.95 trillion. He told Republicans (again) that they need to allow taxes on the wealthy and a closing of corporate and other loopholes, not as class warfare, but as simple fairness and sharing of the load. He told Democrats that they must be ready to make changes in Medicare and Medicaid, or risk losing the programs, given the aging of the US population and the rapid growth in healthcare costs. He said he will submit his plan to Congress a week from Monday, September 19. I think this Grand Plan will be a $2 trillion (possibly greater) deficit reduction plan, including all of the following:

                    * selected budget cuts over 10 years
                    * specific changes to Medicare/Medicaid
                    * ending Bush tax cuts for the wealthy
                    * corporate and personal tax reform with revenue targets
                    * a new spending plan - The American Jobs Act

The six Super Committee Democrats will propose this. If just one Republican agrees, this goes to both Houses of Congress for an up or down vote before Christmas. The House might vote it down. Republicans might stonewall in the Super Committee. In either case they are voting against a strong jobs package - consensus estimates have the AJA growing the economy up to 2%, reducing unemployment up to 1%, and creating up to 1.5 million jobs. And they would be doing this why exactly? To deny Obama a big win and to prevent tax cuts from going up on just 2% of the population.

If one Republican goes along on the Super Committee, and the House supports the bill on an up or down vote, this will be an enormous win for the President: the grand budget deal he couldn't quite get this summer; a decoupling of the Bush tax cuts for the wealthy from those cuts for the middle class; and his entire American Jobs Act.

Republicans will howl that the President should not be allowed to put his Jobs Act into the Super Committee's deliberations; that he shouldn't put in new spending when the process was set up to find ways to reduce the deficit. The President/the Democrats will respond that he is adding in additional spending cuts equal to the new spending; that they are tied together; that you don't get the one without the other; and that agreements are made between people and can be adjusted by the same people. And who knows: there might not be any prohibition against this in the original agreement.

In any case, the Republicans will have to shoot down a clean shot at helping the economy, creating jobs, and supporting the middle class in a way that is fully funded. At the same time they would be shooting down a first ever offer by a Democratic President to trim Medicare/Medicaid benefits. And again folks will ask: and why exactly are they opposing all these good things? And I can't think of a good answer. In the last three years of solid opposition, Republicans have been fighting the fierce fight against Obamacare, Cap and Trade, creeping socialism, government takeover of the economy, or that has been their story, and it has found some resonance with the American public. Now they're opposing jobs for Americans and an enormous budget deal, and doing so for no good reason.

I haven't heard or seen one analyst say that the President could get his entire plan approved. I am saying he is planning to put this through the Super Committee, and he will either get all of it (huge win), or none of it (completely defining the choice facing the electorate in 2012).

Many smart analysts have always said that Obama's game is a long one. Andrew Sullivan at the Daily Beast,  Steve Benen at the Washington Monthly, P. M. Carpenter, and Andrew Sprung come to mind. I believe the President endured the "slings and arrows of outrageous fortune" this summer, to either get a Grand Bargain then, or to get to precisely where he is now. I am reminded of MacArthur before the Inchon landing in Korea, when, in a stroke, everything on the immediate map changed, overnight.

I think that is what we are witnessing. Awesome.

1 comment:

  1. Great Jim, reading your blog is a continual education for me, I love it!